No, the Housing Market Won’t Crash
TL;DR - Great deals are always great deals. You’ll just have to look harder and longer to find them in this market.
There’s talk of a recession coming.
On top of that, interest rates are getting higher every day.
Oh, yeah, and housing prices remain super inflated.
But does that mean that the housing market is about to crash too?
No…
The housing market won’t crash anytime soon.
No, the Housing Market Won’t Crash
It’s Always a Good Time To Buy a Great Deal
You might think that real estate is only a good investment during a certain window.
Maybe you even think that you should only buy when housing prices are low — and sell when they’re high.
But the truth is, real estate is always a good investment.
It doesn’t matter if housing prices are rising or falling.
It doesn’t matter if the market you’re investing in is said to be hyper-inflated.
It doesn’t even matter if a prominent social media guru tells you not to invest in rentals.
A great deal is a great deal.
If you buy a property for a steal of a price, it will always be a good investment.
The key is to find those great deals. And there are always great deals to be found.
Really, the real estate market is never “crashing.” There are just more or less great deals available at any given time.
And that means you have to put in the work to find them.
Most people stop trying, give up on their investing dreams, and lose out big time.
The question is…
Will you be the one who makes your dreams come true or not?
Why the Market Isn’t Looking So Hot
The housing market may not crash anytime soon, but it isn’t looking good right now.
This is because of 4 main reasons.
Reason #1: Housing Supply Isn’t Meeting Demand
There’s more demand for housing than there is supply.
More people want to buy homes than there are homes available for sale.
This is especially true in hot real estate markets like Austin, Tampa, and Raleigh.
But it’s also true in smaller markets that are seeing an influx of new residents.
The problem is that there aren’t enough homes being built to meet this demand.
And this pushes prices up even higher.
It’s also one of the main reasons why rents are so high right now.
Investors are buying up properties and turning them into rentals — further reducing the number of homes available for sale.
This issue will grow as the population does.
Luckily, housing production is starting to ramp up. But we’re still a long way off what we need to be.
Reason #2: No One Wants to Sell Right Now
People are staying in their homes longer and longer — about 10 years on average according to housing expert Logan Mohtashami.
This is because modern homes are just plain built better than homes of the past.
They’re roomier, look better, and feel better.
Top that off with an awesome interest rate and low monthly mortgage payment?
Yeah, sign me up too!
The only way someone would want to sell is if they got an AMAZING offer. Something that’d knock their socks off.
Until then, why not wait for prices to get even higher?
A lack of sellers further reduces the number of homes available for sale and drives prices up even more.
Reason #3: Young People Are Dominating the Market
The next reason prices are rising is because young people are dominating the market.
Millennials (those born between 1981 and 1996) are now the largest demographic group in the U.S. And they’re coming of age at a time when housing is more expensive than ever before.
As a result, they’re being forced to delay homeownership.
In fact, the homeownership rate for Millennials is now lower than it was for previous generations at the same age.
But that doesn’t mean they don’t want to buy homes. They do. They just can’t afford it.
And as more and more of them enter the market, they’re going to drive prices up even further.
Reason #4: The Homeowner Equity Cushion Is Large
The final reason the market’s crazy is that the homeowner equity cushion is large.
For most homeowners, their home is worth more than they owe on it.
This wasn’t the case during the last housing crash. A lot of people were “underwater” on their homes, meaning they owed more than the home was worth.
But this time around, most homeowners have built up a large equity cushion.
Whereas homeowner equity is up more than $5 trillion, total mortgage debt is only up $1 trillion since the start of the pandemic.
This gives homeowners the ability to sell their homes and walk away with money in their pockets – even if prices fall.
It also means that they’re less likely to default on their loans if prices do fall.
People are comfortable with their debt — or lack thereof — and want to keep it that way.
Stay Vigilant
While the housing market may not be looking the best right now…
There are great deals to be found in the real estate space.
And a great deal is always a great deal.
You’ll just have to look harder and longer than you otherwise would.
But trust us, when you start to realize your investing dreams…
It’ll all be worth it.
Happy Hunting!
How We Can Help You
Does investing in real estate sound intriguing to you? Would you like to learn more? We’d love to be of value!
At Undoor, we pride ourselves on teaching new and experienced investors how to maximize their gains with minimal stress. Our goal is to help you fall in love with real estate and real estate investing!
Do you want to get key insights and advice that’ll help you get ahead of the game? Don’t hesitate to contact us for any and all real estate wants or needs.
